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Stanford charged over $8bn fraud

Texas billionaire and four others face fraud and obstruction charges.

19 Jun 2009 19:02 GMT

Stanford has been accused of selling certificates of deposit with unusually high returns [AFP]

Robert Gibbs, the White House spokesman, said on Friday the indictments were in response to the alleged "outsized greed" that had robbed millions of people of their savings and created "part of a culture that led us to parts of the economic disaster that we've seen in this country".

However Dick DeGuerin, Stanford's lawyer, said his client was "confident that a fair jury will find him not guilty of any criminal wrongdoing."

'Massive Ponzi scheme'

US authorities allege in the indictment that the firm would give money to some investors "to perpetuate the false appearance that (Stanford's business) was financially sound."

The charges related to an alleged scam dating back to September 1999 which continued until about February 17 this year, when Stanford's banking empire collapsed.

A grand jury in Houston, Texas has been investigating Stanford Financial Group, whose headquarters in the city were raided in February by federal authorities when the sprawling financial empire collapsed.

The company's assets were also frozen, along with the flamboyant cricket mogul's personal accounts.

The Securities and Exchange Commission (SEC) has charged that Stanford operated a "massive Ponzi scheme" by paying investors returns on deposit certificates using money from other investors rather than any investment gains.